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HMRC internal manual

Employment Related Securities Manual

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HM Revenue & Customs
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Remittance of foreign securities income and the interaction with capital gains - up to 5 April 2015: introduction

TCGA92/S119A sets out the basic rules governing the acquisition cost of ERS for capital gains tax purposes where the remittance basis does not apply - see ERSM180030. Where the remittance basis applies so as to modify the Part 7 charges referred to in section 119A(3), section 119B will in turn modify the CGT treatment of the assets in question. The Part 7 charges which are dealt with in section 119A(3) are those which arise under the following provisions:

  • ITEPA03/S426 (restricted securities)
  • ITEPA03/S438, by virtue of section 439(3)(a) (conversion of convertible securities)
  • ITEPA03/S446U (securities acquired for less than market value: discharge of notional loan)
  • ITEPA03/S447 (receipt of benefit) in a case where the benefit is an increase in the market value of the ERS
  • ITEPA03/S476 by virtue of section 477(3)(a) (acquisition of securities pursuant to employment-related securities option)
  • FA05/S21(3) (transitional charge in relation to shares in spin-out companies) by virtue of subsection 4(b) of that section (election by employee)